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Trump Threatens NAFTA Termination

Donald Trump Reuters/Dominick Reuter

The President of the United States, Donald Trump has once again mentioned that the NAFTA (North American Free Trade Agreement) might need to start being terminated. The countries involved are Mexico, Canada, and the United States. Canada and Mexico are putting up a tough fight for Trump at the moment.

The President has wanted to get a better deal for the American people for a long time. Since he was elected there were people talking about it. Trump has shown consistently that he wants the United States to get a good deal that benefits Americans and their jobs.

Canadians also feel that the renegotiations are a good thing because they can improve the deal for themselves as well as the United States. However, some people had expressed concerns that the negotiations might end up giving Canadians the short end of the stick.  If Canada does end up getting a bad deal then it might be a possibility that trade with the Chinese or the European Union could increase to try and make up for the bad deal.

When Trump mentioned that he probably thinks the U.S will have to terminate NAFTA Canadian and Mexican officials were prepared for it. They expected that and are looking for all available options with the negotiations to modernize the NAFTA deal so that if benefits everyone on all sides in one way or another.

Justin Trudeau the Prime Minister of Canada responded to Economy Minister Ildefonso Guajardo from Mexico and said that the Liberal government would continue to work "seriously" to improve NAFTA.

Mexico reportedly has a plan B in case the termination actually happens.

Guajardo said: “Next Friday there is the possibility that we find an impasse, the possibility that this does not advance, we can’t rule that out,”

“We are also analyzing a scenario with no NAFTA,”  He said.

Guajardo said to Reuters earlier this month that the "plan B"  was being prepped to replace things like the billions of dollars in grain Mexico imports from the United States per year.

While NAFTA talks keep going on for the mean time, Mexico is meeting with other nations to expand trade. Those nations are Australia and New Zealand. Mexico is also hosting trade talks with Brazil this week.  The meetings are apparently separate. The President of Mexico, Enrique Pena Nieto is said to be traveling to China.

This attempt at trade diversification is good. It must dearly noted that it is not an easy task.  Around 80% of all Mexican exports go to the United States. That's a large amount to make up for in the worst case scenario.

Guajardo also mentioned something that could greatly benefit Mexico. If NAFTA did end up being terminated by the United States then apparently World Trade Organization tariffs could come in. It might be beneficial to Mexico.

By Michael Normandin

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